10985 CONTINUES TO BE UPSIDE TARGET; SAY LONG WITH THE STOP-LOSS OF 10800

10985 CONTINUES TO BE UPSIDE TARGET; SAY LONG WITH THE STOP-LOSS OF 10800

WORLD MARKETS

US indices gained 0.7%-0.8% on the back of a report that said the U.S. could ease tariffs on Chinese goods during their trade negotiations with China.

However, the major indexes came off their highs after media reports citing some government officials said that there was no discussion on lifting tariffs.

Morgan Stanley fell 4% after reporting earnings and revenue that fell short of Wall Street estimates.

US oil fell 24 cents to $52.07 a barrel while Brent was off 14 cents at $61.18.

European markets fell upto 0.4%.  A final reading of euro zone inflation confirmed preliminary estimates in December showing inflation slowed in December to 1.6% on the year, while core indicators remained at stable low levels. In the Uk, after rejection of May's original brexit plan, an outline for a so-called "Plan B" is due by Monday, with market participants widely expecting Westminster to push for an extension of Article 50 past March 29.

AT HOME

Benchmark indices ended marginally higher after a choppy trade, extending the winning streak to third consecutive day. Sensex settled at 36374, up 52 points while Nifty added 15 points to finish at 10905. BSE mid-cap and small-cap indices however fell 0.3% each. BSE Realty and Oil & Gas indices gained 1.1% and 0.8% respectively, becoming top gainers among the sectoral indices while Healthcare and Basic Material indices were the top losers, down 0.9% and 0.3% respectively.

FIIs net bought stocks and stock futures worth Rs 842 cr and 445 cr respectively but net sold index futures worth Rs 599 cr. DIIs were net sellers to the tune of Rs 727 cr.

Rupee appreciated 20 paise to end at 71.04/$.

Reliance Industries posted better-than-expected net profit with refining and petchem beating muted expectation while grwoth in Jio and retail was in-line with expectation. Consolidated revenue rose 9% to Rs. 1.56 lakh cr, margin fell 120 bps to 13.6% and net profit was up 8% at Rs 10250 cr. Other income rose from Rs 1250 cr to Rs 2460 cr. Gross refining margin declined to $8.8 per barrel from $9.5 earlier. Jio's profit rose 22% q-o-q to Rs  831 cr. while average revenue per user dropped 1.5% to Rs 130. Retail saw a revenue grow of 89%.

HUL posted a decent set of Q3FY19 earnings mainly led by volume growth. Revenue rose 11.3% y-o-y to Rs 9558 cr, EBIDTA surged 21.8% to Rs 2018 cr, margin expanded by 180 bps to 21.4% and net profit rose 8.9% to Rs 1444 cr. Volume growth stood at 10%.

OUTLOOK

Today morning, Asian markets are trading with gains of 0.3%-1% and SGX Nifty is suggesting about 50 points higher start for our market.

After the crossover of 10870, which was the top made last week, we have been working with upside target of 10985.

Yesterday, Nifty, after slipping to 10844 intraday, rebounded smartly to end at 10905, and is set to open around 10950 today.

10985,the top made in December, continues to be immediate upside target/resistance to eye.

10800 continues to be immediate support, with the stop-loss of which, trading longs can be held on to.

Wipro will report its quarterly earnings today.